New Flood Insurance Bill Allows Farmers to Skip Elevating Barns in Flood Zones, But the Catch is in the Fine Print

This bill, the Flood Insurance for Farmers Act of 2025, makes two major changes to the National Flood Insurance Program (NFIP). First, and most significantly, it creates a specific exception that allows local governments to grant variances for agricultural structures—think barns, silos, and equipment sheds—located in high-risk Special Flood Hazard Zones. This means these structures might not have to be elevated or floodproofed to the standard base flood elevation, provided strict local conditions are met. Second, it authorizes FEMA to offer an optional umbrella insurance policy for property owners, including farmers, who have multiple structures on the same piece of land.

The Cost of Doing Business on the Farm

For farmers and agricultural businesses, this is a big deal. Right now, building or significantly improving a structure in a flood zone often requires expensive elevation or structural floodproofing to comply with NFIP standards. For a massive barn or a grain silo, those costs can quickly become prohibitive. This bill acknowledges that unique reality. It amends the National Flood Insurance Act (Section 1315(a)) to allow local zoning officials to grant a variance if they determine that elevating the structure is simply “not practical.”

This provision is meant to provide regulatory relief, potentially saving farmers huge amounts of money on construction. However, the bill places heavy constraints on this flexibility. For new construction, the structure absolutely cannot be in a designated regulatory floodway or an area subject to high-velocity wave action. More importantly, the local official granting the variance must also certify that the change will not increase flood heights, create additional threats to public safety, or cause “extraordinary public expense.” That last part is the core of the compromise: farmers get flexibility, but the community is supposed to be protected from increased risk.

Who Pays When the Water Rises?

While the variance helps farmers save on upfront construction costs, it raises a question about who ultimately bears the risk. The bill addresses this by amending premium rate requirements (Section 1308). If a structure is granted a variance, the chargeable flood insurance premium will be based on the rate that would apply if the structure had been dry floodproofed, or a comparable actuarial rate. Essentially, the structure is still rated as if it were safer than it actually is, but the premium should reflect a higher risk than a fully compliant structure.

This is where the financial risk gets tricky. While the farmer is paying a higher premium than they would for a fully elevated structure, the determination that elevation is “not practical” is subjective. If local officials are too loose with this definition, granting variances mainly because elevation is expensive rather than impossible, it could lead to more flood damage claims down the line. If those claims exceed the premiums collected, the cost is ultimately absorbed by the NFIP, meaning taxpayers and other policyholders could indirectly subsidize the increased risk.

Streamlining Coverage with Umbrella Policies

The second part of the bill (Section 3) is less controversial and focuses on convenience. It authorizes FEMA to offer an optional umbrella insurance policy for properties with multiple structures. This is aimed at commercial property, multifamily rental property, and, critically, agricultural property. If you’re a farmer with a main house, a couple of barns, and maybe a separate rental unit all on the same parcel, this optional umbrella policy could simplify your coverage, bundling multiple policies under one plan.

Crucially, this umbrella coverage must be charged at rates “not lower than the estimated premium rates calculated according to section 1307(a)(1).” This means the optional coverage is fully rated—it’s not a discount program. It’s simply a convenience feature to help property owners manage complex insurance needs without necessarily changing the underlying financial risk to the NFIP. FEMA is required to report back to Congress in five years on how this new umbrella option is working out, suggesting they want to track its impact carefully.